What is the future of the global economy?

With the rise of new economic powers such as China, India and Brazil (and virtually every other country in one small way or another), is the global economy headed, even faintly, in the direction of equality for all nations?

As growing internet access spreads information, enlightenment, global exchange and commerce across the planet, the gross effect appears to be a leveling of standards, innovation potential and competitiveness. People increasingly have access to the same learning resources, technology and information. So people in one part of the world are setting up businesses to rival others across oceans and deserts, effectively leading to a more balanced world in which New York is not so different from Mumbai, for example. Is this the true direction of the global economy, even for third world nations, or is there some other trend that's harder to see?

Jul 12 2013:
Glad this question came up.
Well our current economic system will inevitably come crashing down sooner or later. Why? Because of two reasons.

1) Our economic system is driven by competition (whether competing for market share, or countries competing for power/resources) and scarcity (not enough demand to meet all wants). Two things wrong with this of course. Competition breeds corruption, and class differences, which in turn creates scarcity. Why is this bad? well its simple...with competition and scarcity, you will naturally create a disequilibrium in the spreading of wealth and resources. This is easy to see as 1% of the worlds population currently owns 40% of the worlds wealth, and that number is only going to get bigger as scarcity is continually driven.

2) Consumption Vanity Disorder - Now the foundation of our economy depends on consumption. Right away there is something wrong with this. We live on a finite planet with finite resources, to even think of a system that pushes "infinite growth" as its number one priority is absurd. So why would we still continue to consume? Well simply because our economic system is outdated, and it was in fact created during a time where scarcity was real, so over consumption was not ideal. But with the technological revolution came an over production of goods. Which could have meant more leisure time and an abundance of humans needs met. Instead it was cock-blocked by the status quo of the time, which was consumption. so our very own values had to become "consuming" as the main priority, simply because it benefited the capital owners at the time.

So in conclusion, our current soci-economic system has no life coordinates. It only recognizes the money sequence of value, which has completely deteriorated from the life sequence of value. It wont be long before this scarcity driven system collapses down on itself due to its own inherent flaws.

Jul 14 2013:
I don't think so. In my opinion if we actually used our current technology towards making an abundance of human needs, we wouldn't live within scarcity, and demand for life essential necessaries like food, water, shelter, and social stability, wouldn't have to exist, it would simply be accessible. Access abundance could be achieved with today's technology if it wasn't blocked by our current monetary-market system, where scarcity and inefficiency is perpetually driven, for scarcity = profits.

So in a sense your right. Human needs will always be a commodity as long as we continue to live within the walls of a free market economy.

Jul 14 2013:
I've seen all the Zeitgeist movies and studied the Venus project last year or two. If we can get people to cooperate and work together we can accomplish anything, including becoming a Class I or Type I civilization. It will take an act of global war to accomplish this. The horror is too vast to contemplate.

A free market economy is the next best thing. At least the poor can exist without fear of death and have the opportunity to become rich themselves. Either we evolve in our minds of get used to chopped beef.

Jul 14 2013:
"the poor can exist without fear of death"? really? i find that really hard to believe when most impoverished people (who likely grew up poor to begin with) are constantly living within the perimeter of death, deprivation, and necessity. Especially If a single parent is working for less than a dollar a day and has to feed a family of 5, im pretty sure death is very realistic, and survival even more so.

Bottom line is the market system is a complete failure when it comes to meeting the needs of EVERYONE on the planet, it only recognizes resource allocation via money transfers only, and has no connection to the actual carrying capacity of the earth, its resources, or actual well being of its people. Its a system that solely relies on growth and competition as its main priority, and with that comes scarcity, uneven wealth distribution, and overall necessity (whether resources or human behaviour/health). So yea I highly doubt that this is the "next best thing"

But If an actual "resource based economy" were to exists, peoples values would have to change dramatically, and it wont be through an act of revolutionary "global war", but a revolution in global conciousness. Which paves the way for changing global values.

Jul 14 2013:
Death is realistic to all human beings. Life, at this juncture in our evolution is simply a journey to death. All a human being needs to survive is Air, water, food, and to some degree, comfort. It is comfort that the degree of ownership becomes critical. Comfort is clothing, cleanliness, health, shelter -a liveable environment that offers happiness and satisfaction.

A market system is not external to the environment of human beings. it is intractably entwined with the social structure. It is how we interact.

In order to change the market system, we would have to change ourselves: the way we live with one another. We can promote activity with a credit exchange system (Class 0 Civilization) or with a technocratic one (class I Civilization -See the Venus project).

We can live without money in a society that promotes the free exchange of goods and services powered by social need. Social greed is promoted by money/wealth gain. Greed is promoted by the individuals need to survive vs. the many.

The choice is ours. But the market system itself will not change our destiny with death. For that, we need Science. At the present time, science is a marketable commodity. Who gains more, a wealthy person who only lives for 40 years or a poverty stricken person who lives till 80? Who experiences more in life? Poverty with good health has more to offer than wealth with short life.

In my opinion, knowledge gained through the life experience is all that matters. Still, I will die with questions upon my lips.

I like your enthusiasm in saying that India will be as ' 'advanced " as any other country ( I am paraphrasing).
Do you think that India will follow the same "rampant " development model that The US has become to be well known about? Will India,s economic progress also spill over to the lower classes? Will the caste system survive economic advancements? It can be said that the US, despite its great strides in industry,marketing etc; has still vestiges of virtual-not-legal institutional "caste system '' which is huge burden on the economy and on the moral fabric of the nation.
I marvel at the home-grown appropriate technology sectors of India and look forward to witnessing India become a major player in the global economy. Can we all learn from economic history? I wonder.

Jul 13 2013:
Thank you dawitt. Being positive and optimist could be the key. I'm just 18 and have not even finished high school yet but I'll try to reply your questions with whatever knowledge I have. Forgive me if I say something wrong.

The ''rampant' development model might be what India might follow since india is truthfully a huge fan of USA,no jokes. But as history as shown, different paths are taken most often and most probably we will be taking a different path too.

I believe that if the economic is not shared with the lower classes or in kinder words, people with limited means, it is not really development until then.

I hope the caste system does not survive. Its a destructive part of our culture. As per my knowledge, the caste system is no more prevailing except in small backward ( like really ancient lifestyle backward) communities which should be no problem in removing once we can think of a solution to educating them.

This virtual-not-legal institution caste system is everywhere. Our humane mentality is to blame for it. We just separate ourselves from people that are different from us. We tend not to mix with people of lower status/lifestyles. Most of us are not comfortable with leaving our standards of living for a lower standard, even when doing for a good cause; its difficult. Once we can figure out a glitch-free economic model, which will happen one day for sure, I think everyone will be happy that day.

India has a lot of people, several times any developed country. Don't you think we can do amazing things too?
We were one of the richest places on earth until the British fooled our ancestors. We have multiples times the people, which also equals to multiple times the brain and ideas steaming from it.
I know many with soo much potential and so much ideas even from people with no education, but lack of funding and real education is keeping them from bringing a change to the world. And one day I know that we will a strong power-house in the world.

Jul 13 2013:
Also, we can learn from everything. So yeah, i think you can definitely learn something from economic history.
First, we need to find someone who knows economic history well. I don't want to read pages of economic history from Wikipedia, lol.

Jul 14 2013:
Simon has supplied a very good answer. I shall like to add a different perspective to it.
I agree that Indians are huge fans of the US. But if I have understood it correctly, an average Indian is more inspired by the material prosperity of the US not so much the fan of the grit, diligence and courage through which people in the US (once) achieved that prosperity.
Paradoxically, an average Indian is a born socialist too. That explains India's long time ties with erstwhile Soviet Union.
So, Indians are unique in that sense.
Therefore, I think the Indian model of economic growth will follow, after a time, a unique path too. Even when India will be the largest economy in the world it may not mean a swimming pool in each household. There will be practical constraints for that kind of prosperity.
If each country in the world lives exactly the way the USA lives, resource wise, 9 earths will be required.
We certainly need a new definition of economic growth and I hope India will provide it.

Jul 3 2013:
It seems the global economy is in flux. It is becoming knowledge and access based. If you do not have the knowledge or the access then you are disenfranchised.

For me, the core economic issue is simply compassion and honor. If we, as a people, favored forgiving debts and honoring debts measured with compassion and principled values rather than the greedy and scandalous practices of modern markets we could overcome the personal tragedies that allow those who profit in markets and from society to exploit and manipulate those without the resources to overcome their own challenges.

Our economies have gone virtual. There is no end to virtual resources. It is time we allow every citizen on the planet the luxury of basic utility and sustainability by quantifying personal need and sourcing global supplies with real numbers and using cutting edge modeling and statistics.

The volume of transactions per day in this world is staggering. If we funded a global initiative with a global transaction fee it could do away with poverty all together, given the right set of instructions.

It is time to crowd source and hack humanity. It can be done. It must be done. It will be done.

Jul 3 2013:
what bothers me is you approach the subject of global economy, and you start with rising powers. rising powers are not directly connected to the economy. the only connection is that they hinder the economy, sometimes more sometimes less. economy is not a national issue. economy is done by entrepreneurs.

the economy grows where there is freedom and there is capital. capital is an umbrella term for all means of production, factories, tools, vehicles, roads, steel sheets, plastic granules, books, computers and yes, the infrastructure behind the internet too. the internet is a wonderful tool, just like cargo ships.

the future of the economy depends on this understanding. if people continue to empower the states to tweak or "improve" the economy, states will grow and the economy will shrink. because the stronger the government is, the weaker the economy becomes.

...this composite word or a phrase in itself is contradictory...when I see material things western are developed and when for peace, meditation and relations eastern are...than who is third world nation...

...for material advancement economy has revolved around few nations in past for industrial revolution, now when it's human, others are taking a lead...and so as same for manufacturing, consumption and other things...

...one thing is assure than economy is stable and growing...nobody has taken the finances to mars...the faces behind the hands are changing...may be they are becoming fewer now...but they are not still fewer than the times kings and kingdoms...

...only one challenge to be looked into is the natural abundance and its judicial consumption and care...the balance...

Jul 21 2013:
I think one can only begin to answer the question when one understands what an "economy" is, and what it represents. Think about what the word "economy" means to YOU. Does it simply denote a structured transfer of wealth between individuals, corporations, and nations? Does it wholly represent an accounting of the world's finite resources? Does it properly take into account human rights, ingenuity, and labor?

My sense - based simply on personal study and observations - is that our present global economy is not sustainable. More so, it is clearly not working for billions of people - the billions who live in slum cities, struggle to find clean water and healthy food, and lack proper educational opportunities. I don't think we can - or should - maintain this path when we ackowledge these challenges.

As such, I wholeheartedly think we need to transition from a money- and credit-based society to one that determines goals and bases progress on the Earth's renewable and non-renewable resources. Indeed, eliminate ALL forms of object-oriented trade and barter. The bottom line is that all of the Earth's resources are the property of all of its inhabitants. [If you're at all familiar with The Venus Project, then you have heard much of this before.]

We waste so much time, energy, and materials on redundant, low-quality products (dozens of models of office chair; dozens of similar "throw-away" desktop printers, etc.), that if we simply refocused ourselves on creating quality goods - using cutting-edge automation - we would notably reduce the pressure placed upon the Earth's resources.

Speaking of automation, we should take advatage of our ever-improving technology, and free ourselves from the dangerous and redundant jobs. Our goal should be to allow as many people as possible the opportunity to reach their greatest potetnional. And this begins with education. Clean water, healthy food, safe shelter, and a well-rounded education should be our top priorities.

Jul 15 2013:
I do not look very optimistically at the future of the global economy as I believe Americans have become quite lazy and spoiled and the world seems to be trying to emulate us. We are all living far beyond our means and making unrealistic demands on our air, our environment, our resources. Until we realize this, the global economy doesn't hold much hope.

I have great hopes for India in economic progress ;the developments of science and innovation.

There is so much to learn from American experiences--these include what to do and also what not to do. I would like to list ,but few points of interest to me. You may wish to know that I was born in Eritrea to Eritrean parents and left home to go to college and then lived everywhere in Africa,Europe and Asia --for the last about thirty years of my life I have been living in The US where I became a naturalized citizen. That gave me an advantage as a societal/political critic to observe the culture and the political economy .Unlike a native born American, I did not have the brain washing that comes especially with the elementary and primary school educational system and later with main stream acculturation.

The American marketing regime is superb---a model to be emulated in my mind.American educational system also may be worth learning from.
The American Constitution is worth studying--but in practice power has been usurped from WE THE PEOPLE.
Immigration policy--has been one of the greatest renewal factor in The American tradition. Throughout its history a succession of immigrants came with new blood to recharge the economic culture with great benefits.
American minorities and women have made a lot of strides in ensuring minorities rights and women s' rights.We almost had a woman President--I believe soon we may have one.

But, definitely India may be best advised to avoid unhealthy American diets of junk foods. American obsession with guns violence and terrorism throughout its history.Avoid American pornography--who needs that when you have your tantra yoga.Please keep your Hinduism and Buddhism-- the two greatest philosophies of living harmoniously.You have given the world Mahatma Gandhi, Meher Baba, Osho, Deepak Chopra and others .

Jul 11 2013:
Goodness, I am not an economist. However, the question what is the future of the global economy? reminded me of the article in Money ... Is the next big bubble Bonds? This along with QE in many countries ... the failure of the Euro and most of the EU countries .... banking failures and the supporting stimulus infusions ... etc.

For the quantitative easing policy, the Federal Reserve holdings of U.S. Treasuries increased from $750 billion in 2007 to over $1.7 trillion as of end-March 2013.

China holds $1.17 trillion in U.S. Treasuries. The Japanese own about $1.1 trillion of Treasuries.

Robert Auerbach, Professor of Public Affairs, The University of Texas at Austin, submits the following: "As of March 20, 2013 the Ben Bernanke Federal Reserve has added $2.101 trillion dollars to the base of the U.S. money supply since September 2008 when the financial crisis erupted. That is a 240 percent increase. The Bernanke Fed, that has sole control over the nation's monetary base (currency, coin and private bank reserves), is continuing its money explosion by adding $85 billion a month."

The impact that the G-20 has on global economy and the "shaky" future of the US and EU economy may send economic shock throughout the globe. These types of failures in the past have eliminated the elite and middle classes by the government taking all the money available to support the growing government .... to no avail. As a prime example was the fall of 1916 Argentina a rising world power that fell to the bottom.

Another prime factor to consider is the economic model being used. I would suggest a review of the two primary models: Keynesian and Austrian.

I would like to be able to say the future looks good but I do not believe that. Further I think with failures in the G-20 would have bad effects on all other countries. When recovery occurs perhaps new leadership will emerge.

This is what I have read. Further research by yourself will be required. Bob.

Jul 13 2013:
At some point, prices will have to fall to empty inventories so we can start over. The last time we did this, we did it with WWII. Until we fix prices based on a global index like food and basic comfort, inflation will always increase to foil the game allowing poverty to exist and cause harm.

I think the next bubble willh be with rental property. Wall street shuffled 12 billion dollars into property investment down in Georgia and Florida. They bought up everything of any value, painted it up and put a rental sign on it. I've been looking for a home for two years now without success. The only other opportunity for small home owners is to build their own and many are starting to move in this direction. That is why the rental bubble will burst. I does not take into consideration that people get upset and with current communications, can see how the game is moving. They then take a different path to home ownership.

Even though wall street is trying to make a profit for their investors, they are following the same paths they did after 2000. Of course this will lead to the same result. It's not business.... it's gambling.

Jul 7 2013:
I'm not an economist, but it seems the direction of the economy relies less on (traditional measurements) of growth and increasingly on the (realities) of our (global environment). What I mean is this. The "peak of" sustainability for (hunter gatherer societies) was reached somewhere around 30,000 years ago "A wild approximation", but a common hypothesis. That's the limit of available resources as it relates to (primitive societies). By that time the accessible world had been populated. In combination with the ice age, the human species was facing (hunter gatherer) catastrophe due to shrinking available game, and other resources etc. Near extinction of the human race was a real possibility. That changed with the advent of agriculture thousands of years later. Today we are facing yet another massive decline in available accessible resources to feed, house,and cloth 7 billion people, soon to be 9 billion. Advances in science are increasing at an astronomical rate, but will it be enough in time? The (leveling) of resource allocation is inevitable in my view. Our survival depends mostly on Education, scientific advancement, stopping rampant fossil fuel consumption and (birth control). Ignorance, corruption, denial, religious, or egocentric fatalism may have pushed us beyond the point of no return already. If we all reject violence,come together and discard the fantasies, superstitions, and tribalism we may have a bright future, for a while at least, perhaps 100-200 years. after that I wish them all luck. They're gonna need it.

Jul 3 2013:
Truthfully, I'm a little offended that you sort of think that Mumbai can't be equally developed and advanced like New York (your statement implies that). Does the thought scare you? Yes, we are backward but yes, development is what every country in the world is striving for. One day, my country (India) will be equally developed and hugely successful in every aspect as other first world countries. In my own defense, we are highly developed in the big cities; we only need to expand that development to other locations.

A global economy should have every country with enough food and materials for survival. There should not be divisions such as First world or third world or whatsoever. Isn't this what we want? Equality and happiness? A globally satisfied economy is what we should expect and what we need to aim for. A bunch of countries savoring all the happiness and carefree life that comes from having possessions and advantages is not what we want, although it is the state in which we are in at the moment.

Your question 'What is the future" can be answered by only ourselves. It can be achieved only by us and most importantly, our future depends only on us. So, I say we try to achieve whats best for everyone of us and not only for the first world countries.

Jul 5 2013:
Hate to disagree but the major cities have islands within the major cities, outside of those islands, created by large companies. The infrastructure outside of those islands can be poor to non-existent.

I am also concerned about the caste system which still exists and the emphasis on hierarchical mgmt based on caste and age, not experience or ability.

Jul 3 2013:
I am convinced that no one can predict the future accurately. People who think it is possible should ask themselves why they think this way. Perhaps it is one of the most common of human weaknesses, we wish it were so.

I notice that most of the comments make no attempt at an actual prediction.

Jul 12 2013:
I am not that sure Barry.
I think a few things can be predicted about the future of global economy, or one can say there are enough indications regarding certain trends in global economy to perceive a future state of it.
1. By 2030 China will be the single largest Economy in terms of size and PPP, sending the USA to the 2nd place. By that time India will be in the third position. By 2050, India will be the single largest economy overtaking China. By then the USA will be in the third position and China, the second.
2. The WECG (World Economic Center of Gravity) normalized on the surface of earth is constantly shifting eastwards from mid-Atlantic in 1980 and the projection is that by 2049 it will lie somewhere between India and China. See Figure 2 of the following document.http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=9&ved=0CHAQFjAI&url=http%3A%2F%2Fciteseerx.ist.psu.edu%2Fviewdoc%2Fdownload%3Fdoi%3D10.1.1.186.1836%26rep%3Drep1%26type%3Dpdf&ei=znDeUeWwJo7yrQfXooHYBg&usg=AFQjCNFuzdvx-ChvDEGbwwLitDTYTpxXOg&sig2=2mVljqXRnG1NytPnKKHK-Q
These predictions are entirely along the concept of free market and mixed economy lines and based on classical idea. My feeling is that by the time India starts to command Global Economy, environmental or natural capital will inescapably start to weigh in and we may see a shift towards Natural Capitalism along the line suggested by Amory Lovins, Paul Hawken and Hunter Lovins.

Jul 3 2013:
The spread of knowledge and information is essentially all that it takes to bring in the equalizing effect that I believe the world is witnessing. We don't need to look back to the colonial era to see the progress that's been made. Although some countries are worse off economically today than they were at some time in the past, it does not imply that even such countries have not moved forward. Critical but not-so-tangible indices such as innovation potential have grown dramatically in this fast moving information age. Wealthier countries can and are artificially speeding up innovation amongst their citizenry with incentives like prizes, scholarships, recognition systems, funding for promising ideas, etc. In this regard, the poorer countries are playing catch-on. Yet a visionary few in these countries who understand the benefits and possibilities afforded them by this free information age are taking very good advantage of it. What they (the poorer countries) must do is get their governance and education right. No one will be able to stop them if they do.

Jul 3 2013:
Is this the end of middle class prosperity? Is this the end for the U.S.A.?

Watch this video: http://www.youtube.com/watch?v=QPKKQnijnsM

As the U.S. American government stands idly by, the super-wealthy increase ever so slightly in number while growing their wealth exponentially. Is the end finally in sight for the U.S. American superpower? Will the middle class be replaced by a massive underclass ruled by a tiny corporate oligarchy?

Jul 3 2013:
I don't think global economy is moving towards creating equality. The GREED based model we have will never be able to bring equality and that's not its goal either. Economy was never out of the influence of politics and power game. Living standards of developing economy is growing doesn't mean it will catch up developed economy as developed economy will not static for long.

Indicators of development are far more wider than those of pure economic ones. Knowledge was never the driver of economy rather access and accumulation of resource were & here might is and was always right.

Jul 3 2013:
I believe the future of global economy depends on many things, i.e. the dissemination of finite resources, the elimination of selfish greed, the growing population demands etc. Currently, the world's economy is becoming less and less balanced with the globe's economic wealth being increasingly concentrated in fewer and fewer.